Fourth Money Laundering Regulations

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On 26 June 2017, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("the New Regulations") came into force. These repealed and replaced the Money Laundering Regulations 2007 ("the 2007 Regulations") and will bring about significant changes in processes of those firms undertaking work in the regulated sector. Some of the key changes introduced by the New Regulations are:
  • A more prescriptive approach to client due diligence, including a list of factors which an organisation should consider as part of its ongoing monitoring obligations;
  • Enhanced requirements in respect of client due diligence for corporates;
  • An obligation on UK companies and trusts to provide appropriate beneficial ownership information;
  • An expanded definition of Politically Exposed Persons ("PEPs") to include domestic PEPs;
  • Detailed guidance on when Enhanced Due Diligence is required;
  • A requirement for organisations subject to the regulations to carry out a firm-wide risk assessment;
  • The removal of automatic Simplified Due Diligence for specific products and types of client.

Along with the above, the New Regulations also introduce new record keeping requirements on UK Companies in respect of People with Significant Control ("PSCs"). In order to implement these new requirements, the Information About People with Significant Control (Amendment) Regulations 2017 were laid before Parliament on 23 June and came into force on 26 June 2017. Now, a company must enter new PSC information in its statutory books within 14 days and provide the updated information to Companies House within a further 14 days, once it has:

  1. Become aware of the change
  2. Obtained all the information needed to enter on its own registered; and
  3. Confirmed the information if it relates to an individual

Failure to provide accurate information on the PSC register and failure to comply with notices requiring someone to provide information are criminal offences, which may result in a fine or a prison sentence of up to two years. Therefore, it is important for organisations to fully understand their obligations under these regulations. If you would like to discuss your organisation's requirements regarding any of the above regulations, please get in touch and we will ensure that you are able to speak with one of our specialist advisors.